Economic stability and health status: Evidence from East Asia before and after the 1990s economic crisis

The East Asian economies of Indonesia, Malaysia and Thailand suffered declines in their economic growth rates in 1997. The Indonesian and Thai government followed the World Bank prescription for adjustment, which included a cut-back in government spending at a time when there were significant job losses. Malaysia chose its own path to adjustment. Evidence presented in this paper shows that although the declines were short-lived that there was an impact on the health status measured by mortality rates for the populations of Indonesia and Thailand. There was little apparent impact on the health status of Malaysians. The lessons for other developing economies include the importance of social safety nets and the maintenance of government expenditure in minimising the impact of economic shocks on health.